♪ money, money, money, money, money, money, money ♪ ♪ money, money, money, money hi, erveds. welcome to the wall street journal repart. i'm maria bartiromo. companies tell us how profitable they are. what does it mean for the markets and your money. what is bob woodward uncovering in his new book about president obama? rare access to the president and how he handles the economy. a familiar face and concern. my conversation with matt damon about clean water around the world. >> it eeps the place where i feel i can have the biggest inl pact on people's lives. >> wall street journal report begins right now.

>> the wall street journal report, now, maria bart row know. >> we'll have all that in a minute. first, bill griffith with a look at the headlines. >> here is a look at what's making news on wall street. the all important earnings season is upon us here with mixed expectations. so far, it's what companies have been delivering. jp morgan chase turned in estimates. housing turned a corner. wells fargo beat expectations but it fell short on the revenue side. alcoa lowered the forecast citing slower economy. by thursday, the dow was riding a four-day losing streak and the nasdaq had the first five-day downturn in three months. america's trade deficit widened

in august as exports fell to the lowest level. $44.2 billion in august, an increase of 4.1% in july. it could be a sign a global slowdown is decreasing the demand for american goods around the world. two retail giants going head-to-head. walmart is going to start same day shipping for a flat fee of $10. obviously a direct shot at amazon.com. walmart shares jumped on that news soaring to an all time high while amazon fell. earnings season is upon us. what is it going to tell us for the economy and what it means for your portfolio. joe, good to see you. >> thank you, bill. same here. >> we are heading into the sweet spot of earnings season. so far, the consumers are holding out. global companies facing weakness

in china and europe. >> i think q-3 will be soft as advertised. i think it will be temporary. the earnings weakness reflects concerns about europe that bled through the summer months. it was an inhibitor to hiring and spending. europe has been displaced by the actions. i don't think it will be as big of a factor going forward. we look for some resolution of the fiscal cliff which is laying on corporate sentiment. i believe 2013, the earnings will have improved. >> do you think this earnings season is factored in our markets? >> yes, bill, i do. i think the equity is a decent discount there of the near term future. we have seen weaker gdp numbers. earnings being soft is largely reflected in the market. >> it was five years ago this week that the dow hit the all time high. we saw a bit of a sell off this

week. we are not that far away from that peak of five years ago. do you think we'll get back there? >> yes, i do. you can definitely see record equity highs. even though the market has taken a long time to get back up to the near previous highs, keep in mind multiples are much lower, interest rates are lower. yes, i think it's a matter of time before we break those old highs and set very likely new highs. >> we are starting to see beginnings of a rebound in the bank earnings, some of the data out there. do you think this recovery is for real? >> i do, bill. remember, it wasn't that long ago people were saying the housing boost is because of weather. we have gone through the spring and weather months and seen housing continue to accelerate. perhaps it's best seen in the homeowners index. it's for real. we are seeing it in pricing.

the balance sheets will help financial analogies as you alluded to. the multiplier is significant and will continue to help the consumer spend. >> something else holding growth back is the fiscal cliff. you mentioned it earlier. it's looming for businesses and investors out there. how do you think it's going to be resolved when all is said and done? >> i think once the election is over, bill, regardless of who wins, we'll deal with the cliff. if the president is reelected, then the republicans will deal with it because they know that the president's leaving in four years. if the republicans win, there will be running to try to fix things. i think it will be dealt with. it might be messy. i don't think it's in either party's interest to have massive tax hikes go in as planned. it will be dealt with. the economy will avoid a recession. congress and washington in general is not that irrational.

>> so many head winds. in your view, bottom line, is the u.s. still the best house in a bad neighborhood? what should investors be doing? >> one should not panic. start to take money out of the bond portfolios that have been seeing massive inflows. perhaps some of the more cyclical names, move away from the dividend player that is are rich. the u.s. is the best house in the bad neighborhood. the good news is historically the u.s. has done well and grown even if the rest of the world economy is sort. low gdp. if we can get spark and resolution in the cliff, we'll do that. companies are in a position to spend and consumers need to buy things that they haven't spent much on. the outlook is still good. you should be allocated toward equities. >> joe, good to see you. thanks for joining us. >> my pleasure. >> back to maria with the rest

of the program. >> thanks, bill. up next, inside the obama white house during the biggest financial crisis in decades. bob woodward will join me. later, actor matt damon on the job that's changing his life and saving others. innovating to bring clean water to those without. take a look at how the stock market ended the week. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. ♪

[ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪ well, we are in countdown mode. it's a few weeks before another presidential election where the economy is issue number one. over the last four years of the obama administrations attempt to unravel the worst financial in decades.

"the washington post's" bob woodward is with me. good to have you on the program. >> thank you. >> the book is spectacular. i want to ask you what you learned during the reporting. the financial crisis and president obama's election three and a half years ago seemed to be an ideal time when the two ideologies could come together. was it wasted? >> the federal government's financial house is not in order. it's in total disorder. no business that you cover would ever accept $16 trillion in outstanding debt with the almost guarantee or in fact the guarantee that next year we are going to have to borrow another tr trillion or two where you have the congress and republicans and democrats deadlocked on how to solve the problem. the question is, can you prevent what you foresee? in other words, we forsee anyone

knowledgeable about this realizes we are on the edge of not just a fiscal cliff, but a calamity. >> you went through the whole long debt ceiling debate which was really upsetting even from business, from being down here on wall street during that time. the markets were in standstill. the business community was in standstill. i feel like we are going through that, again, right now with the fiscal cliff. >> the idea here was to force congress to reach agreement through the supercommittee, which was set up last year. john boehner, the speaker, harry reid, the democratic leader, mitch mcconnell, the republican leader in the senate all were saying publicly and privately, oh, this will be worked out. they will come up with a deficit reduction plan of some kind. they totally failed and so they came up with this sequestration which is essentially, let's

decide what all of us hate the most and put that in the deal so we force some sort of rational agreement. well, the irrational mutual assured destruction is what we now have in law where we are cutting defense, we are cutting things like biomedical research with an ax. it makes absolutely no sense, no person who thought about these things would agree with it but that's where we are. >> one thing i think the president has been unable to do is lead these two groups together. because you can't constantly sit there and watch everybody fighting. what about all the people hanging in the balance? >> i asked the president about this. he says he blames the republicans and so forth. >> they blame him. >> there's blame to go around. there's no question. but, this is so important. this is like fighting a war. you need bipartisan approach and

fighting the war is painful and expensive and doing these things is going to be painful. you asked the right question about the average person out there who has a house, investments, a bank account, anything of value. it's all put in jeopardy because we can't bring some order to the federal house of our money and it's troubling and sad. >> when i speak to ceos, they are invited to the white house to speak to the president. for example, health care ceos are invited to the white house to give the president ideas. they get there, he doesn't listen to them. he gives a speech and does a photo-op and they leave. they feel like they are not being listened to. i think the president does have a bit of an antagonistic community. >> he never closed the deal with

them. i have examples. they have half -- >> the ceo of verizon? >> he was the voe of verizon and they invited him to the super bowl. he comes, talks to the president for 15 seconds, the president sits in front with his buddies and he feels totally used. i mean, you talk and you have done this to the ceos about the way the white house works. the head of ibm made this point to rahm emanuel when rahm was chief of staff in the white house. you have a ceo, the president, but you don't have a coo, a chief operating officer. one person whose job is to get things done. >> it's what bill daly left, i think. >> he did not have the authority as chief of staff. >> do you think it's an ideology the president has, look, business is bad, this is the way

we need to run the country? why? there are smart people around. >> he won't listen to anyone. he doesn't absorb or come up with a plan to execute it. it's all kind of a seat of the pants operation. let's do this, let's do that. there's no long range plan. as you know in business or any large institution you need a long range plan that faces the real problems you have. we are at a very difficult time in our political and economic history. >> no doubt about it as you write so eloquently. so great to have you on the program. thank you so much. the price of politics. up next on the wall street journal report, what matt damon is doing on fill ant pi. the power of a changing world to change the world. >> more people have a cell phone than access to a toilet on our planet.

well, every day several times any one of us in the united states turns on a faucet and the water runs. for nearly a billion others, it's intermitt tant, expensive and dangerous. hollywood star matt damon may have an oscar for "good will hunting" but to control water is

making all the difference. >> every 20 seconds, a kid somewhere on our planet dies because of lack of access to clean water sanitation. you know, three kids a minute. >> what goes through the enormity of it. what does a life without access to clean water look like? >> your life revolves around skavageing for water. girls won't be in school. they will spend their entire day trying to get water for the rest of the family. also, the issue of toilets. girls stop going to school when they hit puberty if there's not a toilet there. >> they co-founded a non-profit organization, water.org. it's to end the water crisis. >> it's a gender issue, an education issue the fact that 433 million school days are lost every year because kids are sick from contaminated water. >> the water in our toilet is cleaner than the water most

people are drinking. >> you have been working on this for 20 years. is it that we don't have enough water on the planet? the water is dirty? where does the issue begin? >> there's enough water on the planet. the challenge is making sure that water is clean and making sure it's where people live. you know, in the united states, there is water scarcity. we have the policies and money to deal with it. we pay twice for our cable bill what we do for water. >> people aren't equally poor. the people without access to water, they are not all in the same boat. in a lot of situations, in urban environments, piping water by people's houses. they just don't have access to it. instead, the people working, holding down jobs are standing in a line at a designated time to get their water.

gary pioneered an idea called water credit, if you can take a loan app and buy your time back. a $75 or $100 loan, you buy your time back. that time you spent collecting water, you can get back. >> they are repaid at a 97% rate worldwide. we are approaching 400,000 people who have gotten access to water and a toilet through microfinance and through their own resources that aren't having to be served by straight charity. we are about trying to piggy back on existing infrastructure. how do we work within the natural forests out there like the market, the power at the base of the pyramid as citizens and customers. >> more people paying less for water means more consumers with money to spend. they estimate the world's poor primarily in latin america, asia

and africa represent a $12 billion opportunity almost totally overlooked. what is the pitch to business and how do you get that buy in to put their resources in the mix? >> i send gary in. >> significant funding from microloans came from pepsico, caterpillar and mastercard. >> it's getting the cost of that down per person helped. per customer served. >> take pepsico for instance. they gave us last year, $8 million grant to really scale up water credit. we find that cost per person reached with that toilet or water connection dropped from 36 to $24 per person in our first, you know, effort with the pepsico foundation. they reupped at a higher level and now we got that per person cost down in this next grant to $ $10. we can bring it down. they can give us more bang for the buck.

i think that really resinates. >> once people start seeing the positive effects, it changes their behavior and perception of these problems. problems like pushing the boulder up the mountain, you say wait, we can beat this. >> water is life and the role of a lifetime for one of hollywood's most famous stars. >> we probably don't know anybody who has been thirsty. i have to remind myself, this is an every day reality for a lot of people. it's just not something you ever are reminded of here because we, you know, water is everywhere. >> you get surprised when you see really what's going on? i mean, do you get as horrified? >> yeah. yeah. it's upsetting, but it's also uplifting. we were in haiti earlier this year and i talked to a little girl who was, you know, my

oldest daughter's age. we put a well in her town. she was going for a couple hours a day to collect water. i said is this going to give you more time to do your homework? she said i don't need more time to do my homework. i'm the smartest in my class. she said it like you know she was. i said what are you going do with this extra time. she said i'm going to play. i have four girls. they don't ever have to worry they won't have time to play, you know? >> you have had such success, you don't need to put your name to this or spend so much time doing it. why do it? why is it so important to you? >> it's the place i feel i can have the biggest impact on people's lives. i have four girls myself. i want them to see who their dad is and be proud of that man. >> we'll have more of my conversation with matt damon next week including the surprising new look for biopick.

you look great. the shots i saw. >> i had good wigs. >> you did really good. we'll be back with the news this upcoming week that will haven impact on your money. look for wsjr with maria on facebook. up. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people

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for more on our show check out the website, wsjr.cnbc.com. follow me on twitter and google plus. now a look at the stories coming

up on the week ahead that may move the markets. we are in the thick of earnings season. third quarter earnings are coming out. also, coca-cola, j & j, microsoft and general electric. retail sales will be out on monday. friday, the 25th anniversary of the black monday stock market crash. down jones dropped in 1987. joining me, christine la guard. keep it here where wall street meets main street. see you next weekend. [ mujahid ] there was a little bit of trepidation, not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time

with my wife and my kids. it's my world. that's my world. ♪